Pleasanton Weekly

News - October 25, 2013

City leaders say no to higher affordable housing fees

'We're kicking the can down the road again,' Councilwoman Cook-Kallio says

by Jeb Bing

With the local economy still recovering and competition increasing for large new retail and commercial investments, the Pleasanton City Council joined with the city's Housing Commission Tuesday to keep current low income housing fees that are charged to developers in place.

That came as good news to developers after a consulting firm hired to review Pleasanton's fee structure recommended raising fees by thousands of dollars.

Builders of homes over 1,500 square feet in floor space must now pay $10,713 into Pleasanton's lower income housing fund. Apartment developers must pay $2,655 for every unit in the planned complex and even developers of large and small businesses, both industrial and retail, must pay $2.83 per square feet.

Representatives of Economic & Planning Systems, Inc., the consulting firm, told council and Housing Commission members in a joint meeting that current fees are inadequate for providing low income housing to meet state guidelines. Instead of $10,713, EPS recommended charging $27,187. Fees for apartment builders would go from $2,655 to $15,694 per unit, and fees for retail and commercial developers would nearly double to $4.67.

"We're just coming out of a recession and vacancy rates in our office parks are going in the right direction," said Mayor Jerry Thorne. "We don't want to mess with that."

Councilwoman Karla Brown agreed.

"I'm not comfortable with the methodology used in this report," she said. "I don't think we'd have much growth in downtown Pleasanton with these kinds of fees.

Although the EPS study showed nearby cities are charging higher fees, it was also reported Tuesday that some of these cities, including Dublin and Livermore, are waiving all fees for new commercial and retail developments.

"Dublin is getting Whole Foods, and we're not," Brown said in discussing the fee structure.

The fees collected in Pleasanton go into a special fund that the city uses to help finance housing projects for those with low- to very-low incomes. In recent years, these funds have been used to acquire land for rebuilding Kottinger Place, housing rehabilitation and second mortgage loans for lower income households and loans and grants for special needs housing such as REACH.

The state requires updated information periodically on what cities are doing in terms of providing affordable housing. Pleasanton often allows developers to pay cash into the affordable housing fund instead of actually building affordable units, which are often dedicated as low-rent, subsidized housing in perpetuity. Recent projects approved as part of a court-ordered rezoning in Pleasanton to allow more high density housing have mostly chosen to make the payments rather than tie up 15-20% of their apartment complexes with affordable units.

Steve Bocian, assistant city manager who has charge of the affordable housing program, said Pleasanton's fee structure was last evaluated in 2003. Prior to that, in 1989, a provision was incorporated to annually adjust the fee amounts based on the Consumer Price Index (CPI). That was done in 1998 and 2003, but there have been no changes since then.

Affordable housing advocates have complained numerous times when new developments are under consideration that there are too few homes and apartments that are affordable to Pleasanton's workforce. But Bocian pointed out that by having developers pay into the city's special fund in lieu of building affordable units, the millions of dollars given allows the city to fund major projects, such as Ridge View Commons and the Promenade and Parkview. Those developments provide special housing for seniors, the disabled and individuals with dementia.

Today, Bocian pointed out, the affordable housing fund balance is $7.9 million, which may not be enough to finance the redevelopment of Kottinger Place and Pleasanton Gardens, where cost estimates are at least $8 million.

Although Tuesday night's joint meeting was considered a workshop with no formal action taken, the council and commission reached a consensus to keep fees as they are, but to ask city staff to review all the options in six months or so and report back.

Councilwoman Cheryl Cook-Kallio said the council has talked about affordable housing for the seven years she's been a member "and we still don't have a substantive plan for dealing with it.

"To some degree, we're kicking the can down the road again," she added.